Fiji businesses face a fresh squeeze after oil prices jumped sharply overnight, the Fiji Commerce & Employers Federation (FCEF) warned on Tuesday, with the federation urging firms and government to prepare for higher operating costs and pricier goods for consumers.
FCEF chief executive Edward Bernard said the price of a barrel of crude rose about 29 percent in the sudden market move, pushing oil above US$100 a barrel for the first time in four years. Mr Bernard pointed to the closure of the Strait of Hormuz and recent attacks on refineries in the Middle East as the main drivers behind the spike. He warned that global market turbulence — including an immediate sell‑off in Asian markets and a loss of more than US$94 billion on Australia’s ASX 200 — will have “tangible impacts” that reach the Pacific and Fiji.
The jump has prompted regional alarm. Singapore, through which all of Fiji’s fuel supplies transit, has issued warnings to businesses and citizens about rising fuel costs and the knock‑on effects. That matters because Fiji imports all its fuel and, as consumer watchdogs have emphasised in recent weeks, is a price taker on international markets. The Fijian Competition and Consumer Commission previously noted that fuel makes up a significant share of imports and that local pump and LPG prices typically adjust on a one‑month lag, meaning Fijians could see higher retail fuel costs within weeks.
Mr Bernard told businesses to be vigilant on investment decisions, workforce commitments and pricing to consumers. He urged government to prepare contingency measures, saying an urgent financial support package for businesses may be necessary if the Middle East crisis prolongs. FCEF did not present a specific cost estimate for Fiji but warned that higher fuel will feed through to transport, freight, food and other essential services.
Analysts quoted by Mr Bernard laid out a worrying scenario: if the Strait of Hormuz remains closed through the end of March, oil could climb to record highs above US$150 a barrel. Such a sustained closure would not only keep crude elevated but heighten volatility in shipping and refining costs, further pressuring import‑dependent economies like Fiji’s.
This development marks a clear escalation from earlier warnings in March when regulators and industry groups were monitoring heightened tensions around the strait and flagging potential price shocks. With the overnight price surge now materialising, business groups, the consumer commission and ministries responsible for trade and finance will need to assess immediate fiscal options — from targeted subsidies to short‑term liquidity support — to blunt the effect on households and small enterprises.
For now, FCEF’s central message is precautionary: firms should review budgets and supply contracts, avoid knee‑jerk price hikes that could inflame public concern, and engage with government on measures to shield vulnerable sectors if international disruption persists.
Leave a comment